Australia to become major defence exporter under $3.8b Turnbull plan

By Adam Gartrell, Political Correspondent

28 January 2018 — 6:18pm

Australia is set to become one of the world's top 10 defence exporters under an ambitious $3.8 billion government plan.

The new defence export strategy to be released by Prime Minister Malcolm Turnbull on Monday aims to put Australia on par with major arms-exporting countries like Britain, France and Germany within 10 years.

The government believes the strategy will create new jobs and bolster Australia's troubled defence manufacturing industry, which struggles to sustain itself based on Australian Defence Force needs alone. A big boost in exports will insulate local manufacturers from the peaks and troughs - sometimes called the "valley of death" - of domestic demand.

"This strategy is about job creation. It will give Australian defence companies the support they need to grow, invest and deliver defence capability. It will make Australian defence exports among the best in the world," Mr Turnbull said.

Prime Minister Malcolm Turnbull examines some military hardware during a media conference at Holsworthy Barracks.

Photo: Ben Rushton

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Australia exports about $2 billion worth of mostly high-tech defence equipment - including electronics, surveillance and tracking systems, and military software - each year. Countries such as the UK export more than $10 billion worth.

The US is by far the largest defence exporter, accounting for about a third of the world's sales, followed by Russia with about a quarter.

The centrepiece of the strategy will be a new financing facility that will make up to $3.8 billion available to Australian defence companies looking to sell overseas.

Trade Minister Steve Ciobo said the facility would help Australian companies achieve "significant sales".

Prime Minister Malcolm Turnbull with a Bushmaster, one of Australia's export success stories.

Photo: AAP

"It will provide confidence to our defence industry to identify and pursue new export opportunities, knowing that when a deal stacks up and export finance is needed, it'll be there," he said.

The strategy identifies the other "five eyes" countries - the US, UK, Canada and New Zealand - as top priority markets. That way sensitive technologies will be protected, while exports will support Australia's key global allies.

But the government will also seek to boost exports in Europe, and the rapidly growing markets in Asia and the Middle East.

The government will seek to use the exports to cement relationships with key countries in volatile regions like the Middle East. Defence Industry Minister Christopher Pyne has previously nominated Australia's relationship with the United Arab Emirates as one that could benefit from deeper, export-led economic ties.

Exports will be carefully managed to make sure the ADF's capability is not compromised. The government will also ensure Australia's international obligations - including around arms controls - are upheld.

The government will spend $20 million a year to support the strategy: helping to identify export opportunities, making sure products are export-ready, and opening doors for Australian industry overseas.

A new Australian Defence Export Office will be established to implement the strategy, and an Australian Defence Export Advocate will be appointed to co-ordinate with the industry, and state and territory governments.

The strategy is designed to complement the government's promise to invest a record $200 billion in ADF capability over the next decade.

One of Australia's biggest export successes has been the Thales' Bushmaster, an Australian-built armoured vehicle that has been sold to countries including Japan.